amount would be derived by taking the cumulative net profit
from all of the homes in the subdivision subject to some unallo-cated costs which might be charged to the project as a whole.
The job cost reports do contain a certain allocation of general
office expenses to each new home. As Mr. Durand pointed out
when that kind of allocation is made, it is important that it be
booked as either cost of sales or as a corporate expense but not
double counted.

[54] Ultimately, Mr. McEvoy conducted an analysis of all of
the individual job cost reports for the Forest Creek subdivision.
He came up with an adjusted cost of sales of $19,435, 251, which
I accept as the correct number. Using the job cost reports is consistent with the manner in which profit per job had been calculated by Robert and Ronald in the past and it is a consistent way
to deal with each home comprising the subdivision.

[55] This leaves the question of general operating expenses
allocated to Forest Creek, which Mr. Durand found to be
$754,642 and Mr. McEvoy found to be $901,630. I will accept
the Durand number for salaries as the difference is Robert’s
increased salary which I have excluded. Much of the remaining
difference relates to 2013, when there were other subdivisions
under construction. For that year, the Durand analysis allocates
the cost based on a percentage calculated by comparing the
number of units sold whereas Mr. McEvoy did so on the basis of
price. For two reasons I accept the Durand approach. First, it is
consistent with using the job cost reports; and second, it is likely
that more of the company’s efforts were directed at Pinehill
in 2013.

[56] I also accept the Durand calculation of advertising and
promotion costs for 2012, but the McEvoy total (with the
Durand allocation of 5/9) for 2013. I accept that most of the
promotion incurred in those years would not have related to
the closing out of Forest Creek but the McEvoy number also
includes the Avenue Designs number which I have allowed at
25 per cent.

[57] I have accepted Mr. McEvoy’s calculation of vehicle
expense for 2012. There was disagreement about whether
meals and entertainment were a legitimate cost. Mr. McEvoy
included it because it was consistent with earlier years whereas
Mr. Durand excluded it because it was only incurred by Robert
after Ronald’s departure. I have allowed a reduced number at
50 per cent because this is an ordinary expense but I have
reduced it to reflect the fact that it was an expense purely
controlled by Robert in those years. In addition, in 2013
this expense is much higher than was historically the case as